Enerkem, a Canada-based company that produces fuel and chemicals from recycled waste, has stopped its plans to float on the Nasdaq and Toronto stock exchanges to raise up to $158.4m.
Last month, Enerkem amended its regulatory filing and said it would sell 7.25 million shares at between $17 and $19 each with a further 1,087,500 shares available to the investment banks underwriting the initial public offering (IPO) to sell if demand is strong enough. Goldman Sachs, Credit Suisse and BMO Capital Markets are the underwriters.
Enerkem’s chief shareholders are Rho Ventures, a venture capital (VC) division of private equity firm Rho Capital Partners which holds 39.6% of Enerkem’s stock, VC firm Braemar Energy Ventures (holding 22.0%) and waste management and environmental services company Waste Management of Canada (11.0%) – which is an affiliate of US-based company Waste Management.
Additional investors in Enerkem, which has raised more than C$160m (US$160.7m) in equity, include oil group Valero Energy, ATEL Ventures, which acts as the corporate venturing division for leasing and financing firm ATEL, VC firms Cycle Capital, BDR Capital and Westly Group, Fondaction, EB Investments and Quince Associates.
Enerkem had planned to use the proceeds from the IPO to complete construction of its first standard commercial facility, in Edmonton, Canada, specifically to manufacture and install ethanol production equipment for the plant. Enerkem pulled in a C$15m round in December, to be invested directly in the facility.
The remainder of the cash raised from the IPO will be spent on funding future facilities, with Enerkem planning similar plants in Canada and the US.
The filing shows Enerkem has totted up small but steady losses in the last few years, making a net loss of $19.1m from revenues of $887,000 in the nine months leading up to September 2011, compared to $8.0m over the same period in 2010.